The following partially completed T-accounts summarize last year's transactions for Kelshaw Company:At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold.
-What is the manufacturing overhead applied?
A) $27,000.
B) $28,000.
C) $29,000.
D) $36,000.

Question

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company:At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold.
-What is the manufacturing overhead applied?
A) $27,000. 
B) $28,000. 
C) $29,000. 
D) $36,000.

Quizplus · Accepted Answer

Manufacturing overhead applied may be calculated as follows:
    = (Budgeted overhead rate × Actual activity)
    = ($90,000 ÷ 6,000 MHs) × 4,900 MHs (Actual activity)
    = $15 per MH × 4,900 MHs
    = $73,500
Thus, the manufacturing overhead applied is $28,000, and the best choice is B.

The Following Partially Completed T-Accounts Summarize Last Year's Transactions for Kelshaw